Next: , Previous: , Up: Indicators   [Index]

10.1 Accumulation/Distribution

The Accumulation/Distribution index by Marc Chaikin is a cumulative total volume, with volume each day added or subtracted in proportion to where the close is between that day’s high and low. For c, h, l, v and with ADprev as yesterday’s Acc/Dist the formula is

                       C - L
AD = ADprev + V * (2 * ----- - 1)
                       H - L

When the close is at the high the factor is +1 and the full volume is added in, when the close is at the low the factor is -1 and the full volume is subtracted. In between is in proportion, so for instance a close at 75% of the range would be a factor +0.5, or a close midway would be a factor 0 for no change to the Acc/Dist.

The starting point (ie. the zero point) for the running total is arbitrary. In Chart it’s merely the segment of data first displayed.

The name accumulation/distribution comes from the idea that during accumulation buyers are in control and the price will be bid up through the day, or will make a recovery after being sold down, in any case finishing near the high. Vice versa for distribution.

Acc/Dist is somewhat similar to On-Balance Volume (see On-Balance Volume). But Acc/Dist looks at close within that day’s range, whereas OBV looks just at close-to-close up or down. An Acc/Dist calculation within an N-day window can be made too, see Chaikin Money Flow.

Copyright 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2014, 2015, 2016, 2017 Kevin Ryde

Chart is free software; you can redistribute it and/or modify it under the terms of the GNU General Public License as published by the Free Software Foundation; either version 3, or (at your option) any later version.